Rules of consumer protection or fair competition can be publicly or privately enforced. We consider the possibility of false advertising by a firm in duopolistic competition where consumers can be distinguished according to whether or not they form rational beliefs about the trustworthiness of...

Unter der neuen US-Regierung zeichnet sich ein Wandel im Verbraucherschutz ab. Der Fokus liegt auf Marktmechanismen und dem Abbau regulatorischer Vorgaben. Eine mögliche Folge sind intransparente Preismodelle. Studien zeigen, dass diese Verbraucher:innen systematisch zu höheren Ausgaben...

This paper investigates the impact of four key economic variables on an expert firm’s incentive to defraud its customers in a credence goods market: the level of competition, the expert firm’s financial situation, its competence, and its reputational concerns. We use and complement the...

In credence goods markets, experts have better information about the appropriate quality of treatment than their customers. As experts provide both diagnosis and treatment, this leaves scope for fraud. We experimentally investigate how intensity of price competition and the level of customer...